below 2% gdp and bring down national debt dead relative to size relative to size of the economy in 10 years. brewster the nation's fiscal cut that tax loopholes that take a fair and balanced approach. at the same time the budget incorporates elements to speaker by last december. they make the difficult choices to find common ground. consistent with that offer come in the budget includes being the president would not put forward such as means testing command that a character in a related premiums and the more accurate the less generous measure of inflation. it includes proposals only so they come together around a complete and comprehensive package to shrink the deficit by

$1.8 trillion over 10 years and are meant the fiscal uncertainty that hampers economic growth and job creation. this remark does not represent the starting point for negotiation. represent tagamet savings and additional roadrunners for those of the. the two cannot be separated and were not separated last december when we were close to a bipartisan agreement. this budget provides achievable solutions to fiscal problems, the crucial a solution desired, we have to do more than focus on deficit and debt. the significance of balancing the budget is clear as ranking member then holland noted, i hope negotiate the groundbreaking agreement with congress to do just that as budget director oversaw three budget surpluses and worked with many on the left in right on a plan to pay off our debt. that does not mean we should make deficit reduction are one and only priority. in addition to ensuring sound

fiscal fitting we will have everyone of these initiatives paid for in our deficit reduction package can i mean day donati done to the deficit. as the president explained, the surest path to long-term prosperity is the strength of the middle class. the budget zeroes in on three things, bringing my job stuart shores and equipping american workers at the skills they need for the united states to be more competitive and make sure hard work amounts to a decent lighting. the strength of manufacturing energy production to invest in worker training and expand opportunities for children and those hardest hit by the recession. the president has provided a blueprint for growing our economy and cutting deficits in the budget shows we do not have choose between the two and we must not. we can adopt a powerful jobs and growth plan even as we embrace tough reforms destabilize our finances. the debate were engaged in is

very important. part of a complex sorting out process and the severn on this committee knows, the path before us is going to be a struggle. it will require decisions that directly affect the goodness of americans and matters to get this right. thank you and i look forward to answering your questions. >> if you could bring the first place i want to export tax reform with you a bit. you're budget calls for lowering the corporate tax rates 20%. question one, do you propose to do that on a static revenue neutral basis? >> mr. chairman, do you need to rethink use traditional restoring? >> you plan on offsetting a paperthin base broadening, is that correct? >> we propose the past reform be done in overall tax reform in

the overall tax reform is to fill a gap we have to get our fiscal house in order. $580 billion of additional revenue. the business pcs that should be done in the way we broaden the base and lower the rates so america can be more competitive. the overall tax package will have to raise revenue. >> we agree the first thing he said, which is lower rates, broaden the base and you don't specify how to pay to register base broadening to determine through tax reform. >> would've had a number of indicative provisions, that there'll have to be others in the business of broadening the base will require bipartisan consensus because each of the provisions we consider base broadening has zealous advocates saying they needed desperately. >> the point i'm trying to make a sum of it's been critical of our proposals to lower the rate.

it sounds like you're basically do the same thing but on the corporate rate. the point is it's tough to do. a lot of zealous advocates to certain tax expenditures and we need to do this are brought face tax reform through base broadening. there is an area of consensus on the proper roach. >> there's some agreement, but i don't want to exaggerate. the raise they should come from high income taxpayers. >> or the people who benefit when corporations do? >> here is what is unique about us. among the oecd countries come in the industrialized world, we have a unique disproportion of businesses that file as individuals. most other countries don't do

this. there are the same as businesses. so when you see the international corporate tax rate of 25%, that means most businesses are taxed at the average rate of 25% or less or are hired based the average. in america, most of our businesses file pastors. partnerships, llc is. what you see here is the red bar shows how we stand on these businesses that make in excess of a million dollars in profits. not even the smallest of small businesses. most of our companies in america are corporations and eight out of 10 according to your data are pastors. nine out of 10 in states like wisconsin. figures the question. if we now have a 39.6 statutory tax rate on these businesses, but we go down to a 28% tax rate on corporations, don't you think that is kind of unfair?

don't you think that the successful small businesses at a competitive disadvantage, where they pay a tax rate 10 percentage points higher than their corporate competitor and the d.c. court? >> mr. chairman, this administration has had a long record of putting forward tax proposals. we have 18 separate proposals, so he very much agree there needs to be -- >> actual tax rates they pay. tocci think a huge difference here suggesting first of all we were at 35. now 396 for businesses, 35 are corporations. to keep the small businesses that 396. tocci think it puts at a competitive disadvantage? >> do individual untaxed if i'm at the same time as businesses make their decision how to organize, they need to know what the individual tax code is and

what the business tax code is. there will be opportunities for small businesses to file its corporate taxpayers and get the benefit of lower rate when we have a statutory is lower because we the laminated a lot of the special provision to keep the statutory rate hike. as we all know, the average rate is higher than the statutory rate. >> your suggestion may keep the rate high enough for businesses and like it they should have a corporation. the administration envisions for them? >> we share the concern for small businesses. i'm 18 separate occasions to help small businesses, we look forward to a bipartisan basis to make sure they're strong incentives for small business. but it's not for the most by raising revenue because it's hitting all businesses. people with considerable income from corporate income and

services and law firm income. if you want to encourage small business, we can work together. >> we cannot merthyr posted the code to try and alleviate pressure of taxes, but instead of having loopholes, why don't we have the raise? that way they decide for themselves what to do with capital, how to create jobs. there is where going to have an issue when it comes to tax reform. i don't want it well on this because i'm putting myself on the clock so we can get to everybody else here. has the president made any proposals since he's been president to raise taxes on families earning less than $200,000 for $250,000 for joint filers? >> the pledges prison and a pledge that it will not hit 50 below 250. another's disagreements on

categorizing, but i'd be happy to have the conversation. >> i'm just trying to save the supreme court says the mandate is a task that obviously has everybody. including people making less than $250,000. the cigarette tax, smokers don't just make about $250,000. but the new 28% tax rate limitation on deductions kicks in families making $220,000. the point is your already reneging on this promise in the biggest tax increase proposal in your budget does that as well. the taxes families blow your definition of middle income thresholds in the plan and train to make here is you can't get all this revenue you want to feel all of this ending without taxing middle-class people. they're getting enough high

income earners they are in the money you're looking for for taxes to pay for all this spending. i think your budget acknowledges this by the fact year proposing to tax people did she to shoot the finest middle income. >> i'd be happy to give you a quick answer on this issues. in terms of health care, it was designed as a responsibility to make sure everyone had coverage and the people go to the hospital, they carry their own fair share of the burden. we decided that way, congress designed it that way. the fact the supreme court chose to see it as something that fell under the taxing powers does not make it a tax in the way it was enacted, conceived or what it does. >> legal arguments can assign categories that have different boundaries for different purposes.

if you go to the hospital come as somebody us is paying the bill in its way of making sure people pay their own way. in the cigarette tax people not by any fewer young people smoke will get benefits from lower health care costs and better health and we will be better off. if some people make the choice on whether to spout comments designed to discourage. >> the fact is that his people and the point i'm trying to make if you get this tax revenue, it doesn't come from the movie star or the hedge fund manager. the acknowledgment comes from middle income people, lower income people. when do you project to hit on the debt limit? min 18 is the statutory date for the clock is so-called reset and you have extraordinary measures. what is your latest projection on what you think those play out? >> mr. chairman, is challenging

to make a precise prediction and we don't have a precise prediction. it was a late filing season on the tax code because the law was enacted in january, so we don't have a good sense of the cash flow revenues. >> what month you think you'll had? >> i hate to answer when i don't know with clarity. we don't have a good sense of what the outlay impact month-to-month will be of the sequester andersen uneven payments that we can schedule the time he notes. we could be plus or minus a considerable period of time if i were to give you an estimate today, so we need to keep working on this. the important thing we need to recognize his may 19 is a statutory limit, and the right thing to do is extend the debt limit so not in the place or people wonder how many days or weeks we have. we certainly hope congress will act accordingly.

>> thank you, mr. chairman for being with us. i hadn't planned -- the chairman raised the obamacare issues, including these, which are referred to as taxes, it is important to point out the republican budget assumes that stream of revenues. in fact, they claim to balance their budget over 10 years. the chart appear will show at the thank you is about $7 billion in surplus, that they counted two sources of savings from obamacare. one, the medicare savings, which we cheaply and in overpayments to the insurance companies and modernizing the incentive structure. but the revenue strain concluded in obamacare without those elements are some substitute they haven't told us about them and their budget would not be in

balance. i'm happy to yield. >> his explanation of corporate tax reform. >> let's now go to the issue of taxes so the plan can have an impact on middle income taxpayers. as you pointed out, the president has been clear on the distinction between asking higher income individuals to pay their fair share of the burden and not what additional burdens on middle income taxpayers. i know you had a chance to look at the math in the republican budget, where they would drop the top individual rate from 39% to 25%, claimed to do it devastate a chill in the analyses, including most of the administration showed the only way to accomplish this object is that you increase the tax burden on middle-income families this summer an average of $2,003,000. could you comment on that?

>> congressman, i want to agree with you on the question of how to think about the health care bill. the fact people pay for health insurance and getting health insurance is very different than the payments they are, but not giving them the health insurance. they can't be compared. on the question of the budget the majority has put forward, it has an enormous reduction in tax rates, does not specify how to pay for it and not enough tax deductions at the top. if you lower the talk straight straight -- tax rate, it would put transit dollars on middle income taxpayers. how will we be designed to something that's for doubt. there's just not enough room. even if you eliminate the

benefit from you couldn't manage to pay for the reduction without raising taxes people below. whether it's 1000 or $2 coming out to look at the specific to designed to know i can't comment on that level of specificity. it would be an increase on middle income taxpayers. >> just to amplify the earlier point you made with republican budget gets rid of the health care benefits, but keeps his savings, including the revenue stream in the budget is the toughest end of the bargain. it would also create how they do fewer to take take away new people by going to the exchanges do not process. could you elaborate more on the distinction you made? there's a lot of talk about how businesses that file as

pass-through entities are small businesses? there's a lot of misconception. when you dig deeper, you find that the so-called small businesses include businesses on the fortune 100 list. they include a whole lot of washington lobbyists who are making hundreds and hundreds of thousands of dollars, washington attorneys, other folks. as they talk about tax reform and pastor entities and corporate tax entities, it is important to remember the administration's proposals have always protected true small businesses mom-and-pop scum of the two believe some of those high income should pay more. can you elaborate on that? >> if you look at where the revenue at the top end of the spectrum comes from, it is mostly wealthy individuals and larger businesses. i think when we have a bipartisan agreement at the

beginning of this year to resolve the issue of the top rates, it was not raising taxes on small businesses in any kind of a broadway. i don't disagree with the notion that we need to encourage small business. as for a specific investment for small business. if were going to help small businesses, which makes her benefits go to small business, not the wealthiest individuals who can afford to pay more. >> you're right and there's a long list of corporations that i'm sure most americans would not consider small businesses to file as pastor taxpayers. we say a word about compromise. he pointed out to present included in his proposal made by speaker boehner and republican senate leader mitch mcconnell, including chained cpi, which creates concerns among many of us in the presence and yet the

house republican budget doesn't include the provisions they themselves ask for, nor do they include any revenue from closing the tax breaks we hear a lot about on the republican side. when a speaker boehner during those discussions with the president last winter talked about a trillion dollars in revenue that could be generated and he specifically said tax loopholes and breaks benefit people. early on in the process he made announcement about how you can find $800 billion that would benefit wealthy people. in the spirit of compromise, speaker boehner would've included those things that the speaker put on the table.

i hope since the president has gone way out there and move to meet the republicans halfway fit in the coming weeks will see a republican colleagues back on the table the things the speaker had called for. one of the issues are going to be confronted in the next weeks and months as you and the chairman pointed out is the debt ceiling. i hope we have all learned from our experience in the summer of 2011 that it is irresponsible and reckless for the united states to suggest that it will not meet its financial obligations. the there's bondholders, social security recipients, due to other people have contracted with the united states government. in the house in the next couple weeks, we are expected to take up a bill that says, you know

what, we can prioritize their deaths. based on that book take on first, but other debts and obligations including this congress have taken on, they don't have as high a priority. could you, mr. secretary, secretary of the treasury comment on what impact it would have on our economy and the signal is sent to the international communist united states were to default on any of its obligations? >> congressman, that notion you prayer a case which is the obligation congress authors should be paid is one that just doesn't work. hhs would obligation your defaulted non. we have never in the history defaulted on its obligations and i can't let that be considered as an option. i don't think there's any alternative to pass the debt limit and he would be a mistake to repeat the brinksmanship we

saw in 2011 and her confidence in our economy. there is no alternative. congress cannot reduce the spending obligated. those are obligations in the united states pays its bills. [inaudible] >> the last point you made that the united states congress azar decided to undertake. the congress has voted to make commitments based on those commitments. could you just amplify that point? >> congressman, there is no spinning taken place this authorized by congress. his superb reader provided for through permit legislation and when the united states undertakes an obligation,

whether it's to pay rent, pay for materials, pay for laborers or to pay bondholders, authorizations provided by congress. failing to pay an obligation authorized would be unprecedented. it'd be a form of default. all the prioritization does in which those would be paid, but leaves you in a position to pay your bills. >> thank you, mr. chaiman. i want to welcome you as well. this budget season to talk about the goals of the budget and the goal of our budget was to create the greatest amount of opportunity for the greatest amount of success for the greatest number of people to return and expand the american dream. we believe our budget would do that. sadly, we don't believe the president's budget deficit have been in that production.

and increases debt, increased dependency, spending, increases taxes. first the government instead of the economy with a budget that matter, either gets to balance, unlike your experience in one of your periods at omb. and then shrieked by a couple things you said. energy say the administration is interested in moving forward with corporate and individual tax reform simultaneously. is that correct? >> in order to lower the corporate rate, is the administration removing deductions, credits, expenditures to cover a decrease in corporate tax rate? >> we can't lose any revenue through corporate tax reform. it would only lower the rate on the business side of smudges are able to broaden the base on the

business side. we have a pretty big hole to fill a $580 billion. [inaudible] >> tax reform overall has to raise $580 billion. if you did the corporate side, beside the would come from individual side and we think he should come from the top end and that has the overlap. >> are some of the individual site cover. >> we have not entertained the notion dared be individual racers to pay for business rate cuts. a couple other quick points. >> do that with good france and germany and the countries are raising a new tax by taxing

financial transactions here in the united states. last week in response to congress in manila said it is the administration's policy was not acceptable from our perspective for other countries to create a tax that has have been extraterritorial reach would levy a transaction in the united states. would you support legislation that would prohibit that kind of tax from the e.u.? >> congressman, i've delivered it very clear message to our european friends that it's unacceptable to many to request the various institutions to make sure they do not impose taxes here. we had to look at the shape effort could answer that question. i think we totally agree it's unacceptable -- >> a bipartisan group moving forward. >> i want to move to iras.

the white house has said curiously, some individuals have substantially more than is needed levels of retirement. it is the role the federal government to define what a reasonable level of retirement nest in the governmental standpoint, but what individuals are allowed to accumulate? >> no to declare, it just limits the availability of tax benefit. $3 million is a limit where the tax benefit would no longer be available. it would not say this much as they used to. >> it's a federal governments role to define a reasonable level of retirement? >> we have no impact without regard. [inaudible] >> the tax benefit would not be there. the saving a compounding want to

save more. the special tax incentives for saving for retirement -- the average an american has $50,000 saved for retirement. our goal has to be more than more people to build that leg of the stools and in a world of chess choices, the trade-off between a $3 million plus retirement -- >> all individuals out to be treated the same in equally so greater success -- >> we do not discourage people from saving without the benefit of the special tax. >> mr. schwartz. >> thank you here to be clear on that last point, i would say if we are actually creating a tax benefit, the middle-class

families and lower middle class families subsidizing those saving over $3 million. it's not a question of the government. it's a question of what to taxpayers, subsidizing multimillionaires. but the question. what i wanted to ask you about this economic growth and the focus of the president's budget on deficit reduction coming meeting obligations, but also economic growth in getting the tax policy rate incentives right to stimulate and engage with the private sector to build private sector jobs. i want to ask specifically about manufacturing and advanced manufacturing. i want to say i believe stokley mr. van hollen said we do need to do the basic research and incentivize that by some of the energy work we do. but we also want to produce those products here in the united states.

the three points i want to make and then i want you to respond. i very much appreciate the fact that there are communities that have struggled after a pause of a major plant closing. i wanted you to take a moment to talk about the initiative in the budget that would encourage communities hard hit by changes in the economy to define that about what incentives would be available to bring manufacturing back. i recently visited the secretary rebecca blank at a training facility run by the union of new workers, new skills that are quite high-tech i have to say. i want you to talk about that. also, wanted to bring up the fact i have a bipartisan bill to incentivize manufacturing of innovative products.

as i made off with a patent. we compete internationally. we have seen britain just reducing the tax rate for advanced manufacturing for patents. i wondered if you speak to the possibility of doing something like that in the united states so we don't do the research, create the project, and then go make a summer else. if he would speak to that. third, to follow up on the conversation of the corporate tax rate and small business tax rate, and that is a choice businesses are making. that is their choice to be treated as a pastor, to use the individual rate because it's cheaper for them. that is what they do. thousands of employees. mr. ryan talked about the fact he is concerned about those business that had profits of over a million.

this is not received. these are prophets of a million dollars, possibly consider themselves to be paid business and corporations. i hope we get that right. i cochaired the working group on small businesses that we are deeply concerned about this very issue about what kind of rate they receive that could make the choice work. but those are the areas that keen to turn about how to incentivize manufacturing can i make sure small businesses pay the proper rate as a lower corporate rates they take advantage of this, which they certainly can. >> congresswoman, i'll quickly try to answer all three pieces. in terms of our incentives for what they call the new manufacturing communities tax credit, it is designed to be of assistance to communities hit at occurrence of dislocation you

describe. we busted up in a little bit, the design can either let the new markets tax credit for more like the advanced energy credit and we look forward to working with congress on a bipartisan -- >> could really take advantage of this. >> on the question of the corporate tax rate, for an entity that chooses to go entry system at the top rate that is higher, they do it because the net tax burden is lower. your fundamental point is correct. our goal when i look at the business tax that is answering the question of where companies moving overseas? parador statutory rates overseas, which drives them come the needs to make the decision to relocate other countries. that's not good for headquarters job or long-term job growth in america. we viewed as part of our growth and jobs agenda is to have the

business tax rate more competitive in the world. >> we're all interested in lowering this race. >> thank you, mr. kerry. >> i want to talk about transparency from a crack at goal policy is. >> the term you're using his responsibility -- i understand that. which is supported by jocund piece of legislation going forward is exactly what the obamacare or affordable health care is? but they support legislation designating that since that's what she said? >> we have legislation, or implementing legislation. >> we support legislation -- >> were happy -- >> you must support the testimony to the committee. >> with regard to transparency and practicality policy, i want to get through this quickly that has to come here that she firmly

worked in a financial sector, working for a firm that crafted a unique provision that he would pay an extra bonus for a federal position you have now? >> that is not what my employment agreement said. >> anything close to that? >> i receive no extra competition. i just didn't lose my pay for the prior year. >> the article in "the wall street journal" has a $400,000 payment issue able to keep that payment -- >> i went through these issues issues -- >> i've never had anybody come before the committee if i was curious about that. >> i was paid for my work in the prior year. >> regarding transparency to the gac is, right now are explicit guarantees to cost american

taxpayers $183 billion to bail them out. would it not be appropriate and honest and transparent if we put the gses on budget? >> we have moved to put all the expenses expect it to take -- >> are -- should all be on budget. >> we put on budget the things that have an impact on budget. >> obviously there's a continuing impact are going to continue to pay out if they go the other way. the private sector is not allowed to have these things out budget anymore. should not be the way here in the federal government level, to? >> we are showing the impact. were also whining down the assets and conservatorship and reducing the taxpayers exposure -- >> the answer is no you don't want to be totally transparent and put the obligation on

budget. >> i'm describing what we've chosen to do. >> with regard to fha, they originally and a projection showed a negative in 2011 come which basically means we are able to spend that money on our side. at the end of the day, the actual amount came to be $2 million, which means they were off by around $22 billion. in light of the fact is an automatic line of credit, does this concern you that they are not treating the fha with the fair value basis accounting? >> i think we do treat the fha properly. the legislation provided a band within which -- >> obviously they've been wrong from 1992 to 2011 every single year and so they've been wrong in part because they do not use fair value accounting. >> i don't believe that's the

reason the estimates are changed. >> they've been wrong in those years, correct? >> in both directions of a period of time you're describing. >> a $40 billion collected figure. >> it has to do with the level -- >> anything up or post to make a more transparent and accurate? >> we've shown us is presently estimated. >> he made promises for four years with regard to reform in that area. do you have any intentions in the short-term quick >> there is policy being discussed. the important thing is that server can on a longer-term plan -- >> the other day? >> with regard to the swap archaic good cftc, is that going on between me soon will you take any role sure the extra and

their men are going forward on this? >> there is a discussion that goes on -- >> what was the discussion? >> as chair of fsoc, i don't take -- it is not a broad power to tell them what they do. >> thank you. >> thank you, mr. chairman. secretary lew, nice to see you here today. i want to get you to the issue of tax fairness on the individual. i agree with my republican collects a lot of times when i resist the notion to talk about fairness because that's always going to be in the eyes of the boulder and what moderate income and lower income than what somebody at a higher income level with bank. the wealthier americans afford

and that word as well as the ability to go forward is not a rationalization for in a tax rate, lower or higher. i admit she said the concept of what happened over the last few years because this seems to me to be the justification for asking wealthier americans to pay more. fan making more and more of the national income. could you give us a little bit of data on what is happening with the upper 1% of growth is supposed to everybody else? >> that's exactly the point. we have seen income growth at the high end, it clicks in income growth in the middle to bottom. you can only tax income were false. but the disparate distribution of income, the tax system ought to reflect that. it's not a question of same they can afford it.

obviously that is part of it. you don't want anyone to bear the burden they can't afford. if we want to do anything to correct for distribution of income in this country, tax laws have to be part of that. we make progress in raising the top rate to 39.6. that was the biggest step in a long time in terms of dealing with inequity. we have to look at growing the economy and creating good high-paying jobs there needs to be a strong engine of middle-class job creation in this country and that is what our prejudicing it doing. >> that's a perfect segue because a lot of people are concerned about what a federal budget does to promote job growth and you've incorporated many provisions of the american jobs act in the budget and i'm happy about that.

the republican budget seems to rely solely on cutting taxes is a way to create more jobs. nothing else that has any job creation a fact. judging from the fact when we cut taxes in 2001 and 2003, those tax cuts did not result in robust job growth as far as i can remember. is there anything to reason the economy has changed but the dynamic would change and result in job growth? >> congressmen, we've seen there are some tax policies to stimulate economic growth. the payroll tax cut was in effect way for a short period of time because the put money in the pockets of people who spend most of their paycheck. tax cuts of the dry and don't stimulate the economy because a

lot of the benefit is going into savings. if you stimulate demand, it gets money into the hands of people spending their paycheck. depends the nature of the tax policy is. one of the important things is the backside of the sequestered. it was not designed to be good policy. that turns out to be something you can accomplish. you can deliver that policy. the reason is meant to be bad policy is to create incentive to reach a bipartisan agreement on good policy. sequester will be a drag on the economy. it will cost half a percent of gdp if it stays in place. at a time when we struggle to get in terms of gdp growth that we could have a half%, that's hundreds of thousands of jobs. that's an important enough reason to come together. our budget provides not just pieces of the jobs act, but

increases in infrastructure it is the road to the seaports and airports to compete in the 21st century. i don't think education can be left out. if it's real short-term employment. this is the first recovery for state and local hiring is ahead with the way it is and the more we put people back to work, the better were in the future the short-term. >> thank you, mr. chaiman and thank you, mr. secretary. the vast majority of people who smoke in america are low and moderate income people. the tax increase in the president's budget will generally have low and moderate income people but the tax increase between $6.5 billion to $10 billion a year depending on the year.

that is not what i want to focus on. what in the budget you did is the cigarette tax increase funds a new entitlement program. this was done some time ago. they accept and to decline because they hope it will discourage people from smoking. but he said that's the case in california. you now have an entitlement that runs out of money. we have the situation where he ran out of money by 2016. it shows the entitlement has a deficit of $5 billion in overtime, entitlement will increase of revenue source will decrease. sms otitis and the problem with a new program?

>> the budget projection shows that we expect revenue will be. i was expressing my hope to see a decline in smoking. it's not what was reflected. >> if i could just respond to your question that if we get the revenue would pay for the program and that is within the budget estimate. i have to look at the issue working on a year-to-year numbers as treasury secretary of the spending side. the benefit of reduced smoke and afterward to occur would reduce spending dramatically. if you look at health care costs, things like smoking and obesity. either way were going to cover the cost but the revenue per savings because of health care outcome. >> you have an entitlement to

100 funding source. >> it actually doesn't -- and they haven't enabled to look at every line item, but by your numbers it is a deficit through most of the ten-year window. i may ask you another thing in the budget. funding for the international monetary fund at the video $63 million, which on the margin of the things we spend will be borrowed in order to increase funding to the international monetary fund. he also proposed a mandatory program. given the domestic programs under pressure currently given the deficit we have, does the president believe that barring $63 billion is a good use of resource? >> the proposal remaking on the

imf is to spot but we've contributed to biron to the imf. it is shifting. >> it really is 63 billion. >> we've made that commitment already. are proposing moving it to a different place because there's better effect. >> this is moving it to the imf is what you propose. you believe that something we should spend money on given the amount is the amount of sequestered. >> it is complicated because we have assets to back up, so in terms of the exposure, it's not quite the same as direct spending. the important thing is the policy. the policy is we have a controlling voice when they need

to. we have leverage the united states can influence the economic decisions around the world and it is something our international leadership. >> in my last seconds, you want to effectively make a contribution to entitlement. >> you make it a mandatory program. >> it actually could be done either way. it's an existing funding stream we are proposing moving it to work and the congress and the most expeditious way. one of the reasons we talk about different numbers on the tobacco tax cut when the program is the lack of budget authority and we look at outlays. i'd be happy to follow what. >> we've heard mr. chairman, plenty of frederick of what the budget house democrat proposes. good morning, secretary, great

to see you. what was the last time i had a balanced budget, mr. lew? >> 2001. >> what were you doing? >> how many times after world war ii were reran up a massive wartime deficit, but before the clinton administration, before the clinton administration did the budget balance? >> there were years of merritt island, but there is no other. her three consecutive account surplus. >> how do we get through that time. without technically balancing the budget? the entire time? >> is that marshak, finagling the numbers? >> the truth is our economy was growing faster teradata says.

we were able to hurt growth very much reduced, almost eliminate the deficits built up to pay for world war ii. >> dynax question and then i go back to 2008 we have a choice, 2009. when they had no growth, to continue insisting that we were doing and i was not being trying to improve the job market and the economy. i was at the folks on the other site to tell me, we have this great deficit in 2009, 2010. and they're absolutely right. but are we suggesting that we should have done that they comment is that what they're suggesting? what would've happened? >> i can't speak to what others are suggesting. when i left office in

january 2001, were projected surplus of 5.6 trying dollars for the next 10 years and president obama took office was the exact opposite. before he began the surplus had been turned into a deficit. >> was their budget, mr. secretary come in primary balance? with the economy growing faster than the annual budget deficits come is that what you're saying? >> does the budget proposed, which are advocating, just back of the? tell us how we do that. >> or reduce the deficit as a percentage of gdp in the end of the ten-year window to less than 2% in somewhere around 3% you going to primary balance depending that interest rates are year-to-year, but for the second half of the budget window, we are in primary

balance, in surplus. in terms of primary balance calculations. >> it is important that question needs to be asked over and over again in your response remembered. i'm pleased the budget also the is an extension to a new state volume cap on tax exempt qualified activity bonds for the furnishing of water in the system from which needs billions and billions of dollars to keep up with the time. it was the wastewater, it added up to 1 trillion, $200 trillion. we started a down payment of recommending what she recommended. either way, for every billion dollars invested in the very things i talk about, we create 150,000 jobs.

>> would lambaste, we grow the economy. >> you don't necessarily have to be talking about cutting taxes. >> it is business activity occurs the economy and creating jobs. >> was a very much business activity in 2008? >> our economy was sliding was no iv sent plane into destiny. if we had not stepped in strongly in 2009 to do with the financial crisis in the economic crisis, there is no time for things to go. if elected others who have run into a sturdy, were growing and they're not. >> and we did not have that money voted on in february 2009, we would've been in in a worse place.

>> thank you, mr. chairman. mr. secretary, i'm a big fan of your work but the clinton administration. first i have to take strong exception with your testimony that a provision to support the public credit by assuring revenues to support the public credit is somehow tantamount to default in other obligations. most other states have provisions in their constitutions to do so and have for hundreds of years. last year, chairman of bernanke credited the relative stability and municipal market, which suggests investors are reasonably confident that they won't be any default among among major borrowers. one reason they might believe that is because most states have rules which paid to have repayment and interest payment at a very high priority above other obligations of the state and locality, end quote.

mr. bernanke sat where you are sitting on told this committee, my concern is about not defaulting on the dad in for me that is a high priority. data prioritization bill would hope very much. since mr. bernanke, got to believe internally the administrations of two minds on the subject and i would urge you to look to the centuries of other states. no estate was able to protect their credit as an excuse not to pay for their other bills. to protect their credit and support and maintain their ability to pay other obligations in the event of a shortfall. protecting the public supports all the other obligations for the government and is the necessary provision in a government like ours now borrowing 40 cents of every dollar it spends.

put very simply, when you depend on your credit cards to pay your bills, you better make the minimum payment person i urge you to reconsider your position on that. not to the happier discussion of the success of the clinton administration under management. is that correct president clinton decreased federal spending by 4% of gdp in office? >> there is a cut in spending and economic growth in more revenue. >> is that correct president bush increase federal spending by 2% of gdp during his eight years that followed? >> i'd have to check the numbers, congressman. >> i believe it is and i believe you might find the correct president obama has increased federal spending by another 2% of gdp in the last five years. is that correct president clinton dramatically increased entitlement spending by signing

the welfare reform act? >> he did sign welfare reform. >> is that correct increased time it dining with medicare part d? >> i can't disagree with that. >> the biggest expansion of entitlement spending until the point as i recall. >> it was a program i thought at the time should've been paid for. >> is a great president obama has increased entitlement spending more with the so-called affordable care act? >> the affordable care act save the bottom line, so it's very distinguishable from the prescription drug benefits. >> do not agree is a massive expansion in entitlement spending? >> i'd be happy to address the issues you raise. >> usury rates is simple. why can i be more like president clinton famously president bush's? >> the reality of demographics

and the difference of where we were in the 1990s and today is my generation is starting to retire. we attempted lots of people coming to social security and medicare and that is what is driving the percentages of spending. are we going to keep pace of that generation? ..

we have had major savings in the affordable care act, and added a life of medicare trust fund. we're proposing in budget considerable new savings including fundamental structure reform. i don't disagree we need more savings. we need ref now get there. >> good morning, secretary. thank you for being here to discuss the president's budget. t a balance plan. it reduces the deficit by $1.8 trillion over the next decade. and i'd like to commend the administration and you for including an element boosts job and economic growth. that is starkly missing from the republican budget plan. i mostly like to thank the administration for standing with american families. especially our older neighbors, our parents and grandparent

because president obama keeps the promise of medicare unlike the republican plan. the republican plan, again, proposes to turn medicare to a voucher. it doesn't decrease cost over time. it simply shifts the cost to our older neighborhoods and parent and grandparent. it's not consistent with american values. at the time when, as you noted, we have a new demographic prices with the retirement of a baby boom population. you keep the promise and you achieve savings in medicare through important reforms. so thank you for that. the other stark contrast is in long-term care for our older neighbors. i mean, it is it has not got an lot of attention. because people know and understand medicare a lot more.

but the horrible cuts that the republican budget makes to the ability of our parents and grandparents to live their retirement year in dignity is scandalous, in my view. med -- medicaid allows people to stay in their homes and not enter skilled nurses. at the end of their life or with a diagnoses they are able to have dignity and get the skilled nursing and long-term care they need. in contrast, the president stands with families to ensure that lifeline will continue to exist. i want to commend the administration, again, for standing with families all across the country. i wanted to direct your attention to another important issue.

it has been a surge on the state of florida and my community. because you're here, this is -- this a good opportunity to raise it directly with you. that is this the problem with tax refund fraud tied to identity theft. something all of us can agree on it's preventing criminals from stealing billions of taxpayer dollars through flaunt tax returns. there are many bipartisan efforts underway. i have a bill with my republican colleague from florida that addresses the issue. it really comes down to your oversight in the irs stopping the refunds from being issued. tied to identity threat is an epidemic. if it hasn't happened in your district yet, you wait. it's spreading across the country and must be stopped. the treasury inspector general,

mr. speaker estimates that the irs could issue $21 billion in fraudulent refunds over the next five years. the taxpayer advocate report in january said identity theft cases -- case reseep increased by more than 650% from '08 to 2012. at the end of 2012 the irs had almost 650,000 identity cases in the inventory. what is happening organizing criminals are stealing the social security numbers of children, seniors, even the deceased. they are filing tax returns using stolen taxpayer names and social security numbers. when the real taxpayer files for a -- or claims the refund. the return is rejected and the life is severely impacted for years. and the problem for those that dealt with these complaints they face a elaborate of procedures

drawn out time frame for resolution. it's an open dem knick florida, georgia, new york, california, texas, ohio. it's spreading. what are you doing urge theist to get in thront of the problem so we don't have the huge hole in the treasury? >> i'm not sure i have time respond. i would be happy to if i did. [laughter] the irs is getting very much ahead of it in trying to deal with the problem as we know it today. made a good deal of progress. the problem is the headachers keep -- hackers figure out new way to get in it. it's not problem we can solve once and consider it over. we have to be vigilant on an ongoing basis to ensure what we're doing. what we agree is right to protect our taxpayers, social security recipient from the attack. >> thank you. >> can you define a term you used earlier primary balance.

they reached primary balance. >> yeah. congressman, primary balance is a term economists use to describe when the only deficit that we have is the debt service for previous -- accumulated. what is the payment right now? >> i'd have to look up the exact number. >> around $2 24 billion a year. do you remember bhat interest payment is anticipated at end of the ten-year window. >> it's several hundred billion higher than that. it grows we because with have a large debt. and interest rates will go up. >> if it's consistent with cpo estimation by the end of the ten-year win it's 857 billion a year. i'm confused by your statement we get to balance all but the last trillion dollars. we still haven't balanced. we call it balance except for $587 billion. does that seem -- in that last year, the deficit is less than

2% of gdp that means with the economy growing faster than that. set coming down. >> i understand. we see in our budget. we get the actual plan where we're paying out what we bring in and actual balance because the growth as well. i have seen some of the growth estimation. i want to ask you about the -- a bit about oil and gas and coal. yrp those three specific injuries picked out to say it will be taken away from those three. >> it's not what the budget says. the normal business expense will be taken away. >> exactly. but you -- [inaudible] >> the wage fuel. all of that. >> the normal business expense. >> we would apply normal business expense. we wouldn't give extraordinary treatment that the industries have gotten in the past. >> like the 199 that every domestic manufacturing gets. they should get that as well? >> i'd have to look at the specific provision. >> i'll tell you what.

the 199 manufacturing right now every domestic manufacture manufacturer of anything gets 199 tax credit. that should be left in. that's a normal business tax. >> what drives the policy that is in our budget on oil and gas. the better part of a hundred years we had generous tax treatment for oil and gas. it helped build the oil and gas industry in this country. that's an they is competitive and no longer needs a special completion and other resumes that go to. it should be treated at a level playing field with other businesses. >> current businesses now should not have normal business expensing because thirty years ago, fort years ago, business were expefm the business is successful. i'm trying to figure out the philosophy. >> the flolts if i, i can tell you is clear. they should be treated more like normal businesses. not want to extraordinary way they have been treated. >> okay. >> if there are specific issues to work through there. we look forward to working

through them. >> the budget eastbound -- the green book coming out use the term neutral. they want to have neutral investment to oil, gas and coal. actually they use the term neutral investment in energy. it's interesting there's about $40 billion normal business expenses taken away from oil and gas and coal in just in one line item there's $20 billion added to a lot of areas. is it neutral to take away from one and govern another. at one point it refers to neutral energy policy. i want to make it knew thrall and the other area to give significant to clean energy. i have no problem with. >> congressman -- that's a good thing. >> e the goal it to encourage investment in renewable and energy. give the benefit of the technology got when they were young industry. >> is it the anticipation in the next ten or fifteen years that all of the renewables will be able to catch up in surpass what

is currently with oil, gas, and coal. >> over time. >> i have no problem with wind and hydroelectricity and solar. the assumption that we're going take away normal business expense from oil and gas and coal which will slow down the reduction and increase price. the same as the cigarette tax currently in the budget actually said we want to decrease usage by increasing the price. we get rid of revenue. it seems to be the same with oil, gas, and coal. we increase the price at the pump or home heating oil or electricity increase the price of those and try to supplement off to other areas which every economist i've seen deals with energy economy said those technologies probably not for thirty years or more to get close it catching up. 9 percent of the portfolio we supplement the other 1eu89%.

>> i don't think the proposal on oil and gas industry work. i would be happy to follow up with you. >> thank you, mr. mcdermott. >> thank you, mr. chairman. welcome, secretary. i couldn't -- i've sat here and listened to this debate about debt and cutting and cutting and cuts, then i thought about what the president proposed which is a vision for the future of investment. and i was thinking to myself, you know, -- [inaudible] i can remember i can imagine coming in here and explaining why they bought the louisiana purchase. why did they make an bunch of land with nothing on that anybody could see, and we would have said in this climate, we should not spend the money. we should not invest. i'm sure. and the same with secretary

bought that famous icebox. we call it -- [inaudible] we would never invest in that. why are we wasting our money? we have a civil war going on. why should we be out there spending and investing on something like alaska. what i would like do you talk about is we watched europe deal with the same economic situation we're dealing with. and they had such magnificent success with their awe tearty measure. i think unemployment rate in spain is 22% and something similar in italy, yet we continue to investment despite the i are sees tense of the -- resistance of the republican. we continue to invest and moving forward. i would like you to contrast what is going on in europe with what is going on here. because i think the lesson is clear. >> congressman, when i was in europe last week, i tried to

emphasize both with a we should have common and where we take a different path. what we have in common is that we all need to deal with the reality of middle and long-term fiscal realities where we have got reduce deficit and get our fiscal house in order. but we have to do it in a way that is balanced so we can get the growth and job creation that will enable us to have the kinds of healthy economies who will make it possible to achieve those goals. i think if you do your cut up front what you're doing is slowing down your ability to rebound, grow, and get the kind of fiscal correction that we need here and they need there. so it's a question of timing and balance. not a question of are we acknowledging the need for both? the president's bucket is very clear. he will accomplish this $4 trillion of deficit reduction in the ten year window. he does it in a way where we grow the economy, we create jobs, while we're doing it.

i do not believe you cut your way out of these problems alone. if we don't educate the next generation to have the jobs we need. there will be millions of jobs unfilled. more will go elsewhere. we stro have the best trained work force in order grow. i think that same argument can be made on infrastructure and other areas. we can't do without with regard to the fiscal reality. we need to be an path where five years from now, ten years from now we are steadily reducing the deficit and the debt and percentage of gdp. the president's budget does both. >> the jobs increase and more people being paid and therefore paying taxes it helps the deficit itself by make the gdp increase. >> absolutely. we balance the budget in the 1990s because we encouraged the kind of confidence in the economy that kept the economy growing and jobs being created. >> can you give me any reason why the sequester cuts to the

national substitute of health would be good for the economy? can you see any way that the republicans could justify those cuts to the ?ut of health? >> no, i can't. for thirty years, i worked on issues related to the funding of the national institute of health. there's been a broad bipartisan agreement it was the right thing to grow our economy and have intellectual power to compete in the future and solve the mystery that are associated with the worst diseases we is in this country. i can't imagine there would be any willingness to affirmatively enact the kinds of cuts that sequester would impose. >> my mind or my memory is not perfect, but it seems to me during the bush administration we made a major increase in our investment in the national institute of health. i hear one of my colleagues sort of saying that the bush era was a terrible one because of the things went up and the debt went

up and the rest. isn't it true we made a major investment under bush? >> there was a major investment in the clinton administration, in the bush administration, and the obama administration. it's been something there's been broip agreement on. i would note the head of nih in the bush administration has been critical of the impact of the cuts on sequester both in term of medical research and future economic growth. >> thank you. >> thank you, mr. chairman. thank you for being here, mr. secretary. i want to go back to questioning from the gentleman from georgia related to the limit on individual type of retirements. this would apply equally to men and women. >> it is neutral with regard to gender. do you think that women need less retirement income than men? >> i don't think this is a provision that says either men or women need more or less. it's a provision that the tax

benefit should be available to a certain amount. and the amount is $3 million. >> this that case, i'm in at the loss on the pop. the limit is based on a gender-neutral contribution. and women live longer than men. annuity are more aexpensive. and this means that any cap on a tax advantage retirement plan that set equally for male and female. a female will necessarily be on unable to actually purchase the same level of annuity a male able to. did the president take this to consideration before putting this policy forward how it would affect women? >> congresswoman, the vast majority of womens have retirement under $100,000. the average is $50,000. we are talking about few people. if you would like that work together on ways to make sure that it's adjusted by life expectancy. we can look at things like that. it was really a way of saying that a world of tough choices, you know, to have tax incent ifor very very large retirement

savings is something we can't afford. >> let my say this, i believe after being in the public sector for years that they are better than six. to encourage people do they can on their own to be able to save and have as much as they can for their retire as much as they would like to have. >> if i can say on that, we think one way to put the carrot out there is have auto ira people much people are automatically signed up and people get more of the practice for saving for their retirement. the government should get involved with sticks. let me go back in the opening remarkses i found it interesting you talk about since the president came to office the

economy is stronger. you said something, and i didn't get all of it down. i wrote down your reference to political gridlock. stopping his -- the economy from moving forward. am i correct in ma -- what i heard you say. attribute to lack of full recovery. >> i was referring to political gridlock something a dprag on the economy. we can't say there's only one thing. if you look back to 2011. it was not a good thing for the economy. >> so let me go to what i hear from my constituents. i asked them what keeps you up at night. this is what they tell me. one thing that keeps them up, the massive deficits which create the crushing debt that they don't know what is going to happen to them -- the mandate. we don't have a regulation about

what they do with keeping health insurance for their employees. and third with are all the new regulations that hit them. i hear it many times in the banking industry with the dodd-frank. when i hear continually from the industry the epa aren't cost-benefit analysis done or scientific information to say they are necessary. and so this is what i hear. this is what i hear continually constantly from my 19 different counties. and that's what gets economy is growing which is jobs. you made another comment that bothered me. that what we have to do is correct the distribution of income. is this really what the administration's policy is that it is a policy of government to correct the distribution of ? >> the administration had a

stronger record on cost-benefit analysis than any recent administration stronger than the clinton administration, stronger than the bush administration. and in areas like epa we have done things like the clean car rules. it's been trail blazing in term of the kind of agreement where they come together for better economic outcome. on the question of new laws we're working to implement them as quickly as possible. you know, with a little challenging in the front early years because congress was resist ending. appropriating money and a challenge to keep up. we we will get there. in term of the income distribution question, what i meant to say we have a disparity of income growing. it is something that has to inform how we make our policy. i believe that the tax code should be, of course, for correction in that. >> we're out of time, mr. chairman.

i realize that. i would like in writing a little more explanation on income distribution. i don't believe that is a government's responsibility for search what we should be doing. >> i agree. i'm happy to respond. >> the gentlelady in writing. >> thank you very much. good to see you. congratulations. >> thank you. >> thank you and everyone on behalf of the american people. thank you. >> for the work you do each and every day. of course, the president clearly sees the length between the morally correct thing to do and the economically smart thing to do. after all the budget is a reflection of our nation's value. he prioritizes job creation before blindly making the broad cut to programs. the american rely for economic security. vital nutrition program protected in the budget. investment in mental health and prevention, crime prevention and

effect i have treatment of hiv and aids. i'm glad to see the innovative strategy as it relates to the neighborhood, commitment to education, as well as universal preschool for every child in america comp is a great huge factor in reducing poverty throughout our country. also the budget extends the very important expansion of the child tax credit. the earned income tax credit. i can go on and on. in stark contrast to the republican budget where $6 trillion tax cut for the wealthiest of americans and 66% of the republican budget they cut our nation's safety net. i want to thank you and the president for that. much of our discussion here, since i've been opt committee how do we look at strategy to lift the fifty million people who are living in poverty now

out and put on a pathway out of poverty. thank you. i want to ask you one thing, a couple of questions. when nearly 50 million people are living in poverty and cut off from economic security of our country, how does it impact our overall economic security of the country? secondly, one of the parts of the budget that is very troubling to me, personally, and others as chained cpi you came up with the protection that are put in place to shield a very elderly and most vulnerable from this. but yet it was not so bad why come up with protection when middle class and middle income seniors rely on this also? and i don't quite understand the protection and it's okay to do. with regard to cuba, the office of what is foreign asset control, you continue to spend resources on enforcing strict travel and trade sanctions with cuba. the country dating back to 1998,

defense intelligence agency said it was not a threat to the united states national security. it's still on the list of terrorist countries. what in the world is going on over at opec? in fact. have you blocked or times have you blocked or intercepted a terrorism-related financial transaction supported by the cuban government. >> congresswoman, starting with the question that you asked on economic impact. people below poverty not being fully integrate to the economy. it's a real issue. you look at the job listings in this country. we have millions of jobs that are not filled. while we have millions of kids who never had a job. that's not good for the economy, it's not good for the kid who aren't getting in to the labor market and developing the work history that will make them be

stronger as individuals and stronger contributors to the economy. our budget tries to with that. it tries to with the fact that we have to make sure that our young people get the skills they need, and i have never heard anyone stronger supporting that than ceo trying to investment in united states. they come and say we need to make sure we have workers we need for the future and infrastructure to get the product to market. that's where government can help us. i think we have that obligation if we care about our people and economy to get it right. on chained cpi, it cousin have the effective lower the increase. not the base benefit but the increase because a different measure of inflation. i think the president made clear it's not something we would have chosen to to. in an attempt to find an agreement we have been told time and again it's something that would have to be part of an agreement and acceptable to republicans in this environment, it is something we can defend on a technical basis. it's more accurate and because

for middle class people, you know, it's a burden that is relatively small. the most vulnerable even $10 a month for the most vulnerable is a big deal. if you live to be 90 years old and all you have is the social security, that $10 can be the difference between food in the last couple of days of the month. so i think we have to distinguish between what impact going a more correct measure would have. and we have, you know, put in a way that we think is fair. by saying that the most vulnerable have the benefit go up. not because we have the overall adjustment being faster. we will make the decision to go in and make sure they're not hurt. >> thank you. >> thank you, mr. chairman. thank you for appearing. i have four sets of questions i'm going run through quickly. supplementally. first thing has to do with the crap i look at the budget. how it's crurkted. because the choice of the

underpinnings of the assumption can drive the outcome substantially. and it particular in i noticed that the president used estimate gdp growth, unemployment inflation and interest rates that are more optimistic than the crob cbo. i would like to have the information about two things. with a what would happen -- why did we use these? two, what would happen if we receipt is the rates to the assumption that the cbo is using? secondly, i think that you and the president and we in the house of representatives agree on one thing. with respect to moving the economy forward. we need to grow the economic -- we need to grow opportunity for everybody. so the question on the subject kind of like this. how do we grow the economic opportunity whether we are raising taxes on the economy? the president is proposing to

raise taxes to a level as a percent of gdp than higher than the clinton administration? so how do we think that is going to generate more jobs and more economic growth? the second part of this question is this, if you raise taxes on business, how do you expect that business to invest more in r&d and hiring people, and property planned equipment? how do we expect the businesses to produce more and better products and service lower costs. these are things with need think about. in particular i think about the woman in texas who owns a chain business. she's locked down. she got her taxes filed last week now she's locked down. she has 19,000 pages of regulation related to bureaucracy. she's not hiring today because that have. my question is this on top of that how is she going to be

better off and pay a better wage and invest in the location when the president is proposing to raise taxes on her? another example is the president has this oil and gas company which are the highest effective tax rate in the country. 41% versus what most companies 26%. how does it encourage more investment and natural gas which has done more than any -- our emission today are lower than the kyoto protocol it's because of the investment of natural gas. now the president said we want to raise taxes on industry so we get less investment and therefore your environment the reciprocally. the third thing that and i think that i would assume that you believe and the president believes and we in the house believe we need a more aever accountable and efficient government. i bring a slide. the picture of jeff neely sitting in hot tub.

jeff was a gse employee who hoisted million of taxpayer dollars on conferences. the person back on the payroll making just under $2,000. he got a bonus last year. i haven't seen anything the president's budget that creates a smaller more considerable efficient government. we have a gao report here that identifies tens of dollars of dollar in duplication. i didn't see in the president's budget to take care of that. another area is the part of the stimulus the doa department of energy in a slush nawnd used to invest in things in the result of the organization through the investment. i would like to have an enhance risk to >> are we doubling down on more stimlis type of payment? why do we think it's going work better this time than the last? the next hearing has to do with

what i'm going to u call trying to help people come out of poverty. since the poverty we spent dislr 19 trillion. we have got more people on food stamps. why didn't the president propose a plan to scrap current welfare and start with something new to focus on creating paycheck for the folk and give them a hand up. why don't we stop white house party and, you know, for every day every hour that we keep air force one unused. we can pay for 18 days to keep the white house open for visitors. why are we taking so many presidential vacation? i have run out of time. i have a retee call question. how can we president's bucket using a balance approach when it never balances? thank you i yield back. the gentleman's ability to respond in writing. >> thank you, mr. chairman. thank you for being here.

and congratulations. there's been a lot of discussion in the committee about deficit reduction in the hearing and budget consideration. and the president's budget cuts the deficit by additional 1.8 trillion over the next ten years reducing the deficit to 1.7% of the economy of gdp by 2023. again importantedly in a downward path beginning in 2016. that is of course in addition to the deficit reduction we have already done combined of 2.5 trillion. so we are now with those two figures defined at actually exceeded deficit reduction recommended by simpson bowls. there's a lot of discussion about that. deficit reduction is not an economic development strategy. or a growth strategy. one of the most effect waive i believe we can grow the economy and ultimately deal with the deficit get people back to work

and grow job in the country. it reflects for three important way questions do that that will help to strengthen the foundation of our economy. you said in your testimony cutting taxes alone doesn't create jobs. it's the demand of the middle class of job middle class family goods and services business produces that create jobs. so people talk about the job creator. job creators in the country are middle class families who have job or purchasing the goods and service business produces. my friend on the other side of the aisle proposed a budget that the economic policy institute said will cost 2 million jobs in 2014. add to that the sequestration which does not replace another 750 jobs. and so what i'd like to ask about is what this budget does to create growth and jobs because to me that's the real crisis facing the country. i'm from a state very high

first, second, sthird unemployment rate in the country. how is the federal budget reflecting the urgent priority of getting people back to work? the three years i particularly president focused on is manufacturing and the developing of manufacturing to rebuild american manufacturing. investing in infrastructure to rebuild our bridges, roads, ports, if we have an economy to compete in the 21st century need to have a infrastructure capable of supporting that economy. it it's a way to put people back to work and rebuild america. third, education, the great investment in prek. protecting student loan interest rates from doubling.

replacing the sequester which is costing jobs with sensible, middle and long-term deficit strategy balanced between revenue and spending. that. will create jobs by creating economic growth. economic growth means jobs. a half percent of gdp makes a big difference. in the specific areas you raise, manufacturing, and infrastructure and education, these are obviously pillars of what the presidency both as the key to the economic future but also things question do today to create jobs. truth is the manufacturing

initiative are not about twenty years from now. it's about now. the research and development about the future. but the manufacturing of tax incentive are for today. and infrastructure, we ought to be working now not ten years from now to repair our bridges or ports. we will retbret it if we find ourself a better economic times with higher interest rates and more problems with the bridge and port. we don't get to put off forever. education, i would say that it is, again, good for the economy today and good for the economy in the future. every opportunity we create for early childhood education or higher education or middle school education that means teachers in the classroom. it means schools being open and our young people getting skims they need so twenty years from now we have the best trade workers in the world. that's what the budget is about. thank you. as i understand you have a time

crunch, secretary lew. can you hang until 12:30 so we can get through the rest. is that possible? what i would propose. talk about this as knocking the time down 3:00 each. in order accommodate ferch you stay for 12:30. yes, mr. chairman we can. >> we'll knock it down to 3:00. it's now -- [inaudible] mr. williams. mr. williams is phoenix. yep. >> thank you for being here. i'm a small business owner. have you ever run a business? >> i worked in businesses. i have not had my own. >> do you ever run. >> i have not had my own business. >> are you concerned that the debt our country is obtaining is going to eventually go to higher interest rates? >> i think economic growth will be to higher interest rates. ic we have to plan as our budget

does on a time of higher growpt and interest rates. >> coming lowly back to a nor normal level. i'd have to . >> i don't think our budget goes that high. >> you're in business and you have low interest rates like today. most businesses right now are paying down the debt. they are not paying higher interest rates. it's it time to pay it back. >> i don't think we should have build it up. i'm going it tack it to -- i ran three surpluses. we're not there. with we hit a recession. we had no capacity to deal with it other than by we were in deficit and had a bigger deficit. we have to slowly work our way out. the budget gets us to a solid stable place. >> what is the highest rate you think can be charged to small business? >> i'm sorry. >> we're 39% now.

the highest in the nation. that -- i can tell you that doesn't help small business. what is the highest rate you and the president think they can charge small business before they collapse and break? >> obviously businesses choose whether to organize on the corporate side or individual side. we we have not proposed any increase beyond the current 39.6 on the individual side. the better we do -- i heard you talk about. what is his deal. >> it was not a simple as this. it was difficult negotiation we were negotiating with republicans to refuse to put taxes on the table. >> forget it. let me pose this. i'm a small business owner and i can tell you your not helping

small business. the burden that the administration is putting on small business unbelievable. i would suggest you look at texas or nod see what less government and competition what it does. when you start talk about raising minimum wage and capping the maximum wage in the country. it's a bad deal. it should be unlimited opportunity not unlimited lieblght. small business is hurting. you need to understand that. and i hope we don't get to the 7.8% unemployment where you can save $50,000 and that's all you can save. 15% of the people in poverty. i hope that's not the norm. i figure that it is. i think that it's a dangerous course for our country. thank you. >> thank you. it's a big difference, i think. secretary lew, we appreciate

your patience. you have been here countless times i put one item on the table we would like to explore further dealing with infrastructure finance. in the -- which expired in 1995. there's virtually no money in the super fund. install clean up around the country. it was a deal made with the industry years ago. i hope we can talk with the administration about that and have a conversation what we're going do with a transportation trust fund in -- because of the outstanding efforts of the administration fuel efficiency if we're going to fund transportation based on gallons. we're going to be in a downward

spiral over time. we need to have an opportunity to look at that. i hope there's an opportunity to at some point talk about travel being that would help substantial lose and move forward. but i wanted to just get your brief reaction. i know, you're not secretary of defense. but the top line considerations where you have moved to try and help offset some of the cost of the sequestration lookinged at which are far surplus to what we need at home and abroad and maybe stopping the decline and the% age that military personnel pay the retiree for their health care. which is actually going down. it's going up for everybody else. some of my friends on the other side of the aisle particularly those responsibility are somehow pretenlding this would be outrageous. it's a violation of all that is holly and not going get their support.

can we move forward with the department of defense if we don't start looking at some of the areas? >> congressman, not currently in my area of responsibility i spent a great deal of time working defense department during the plan. i think that the strategic plan the defense department put together to save $500 billion over ten years is one of the best piece of strategic budget planning i have ever seen. it reflects military and civilian leadership making the choices of how do we secure our national defense and hit the target. it's across the board cut that don't make sense. that don't move the national security interest forward. >> i thank the chairman. thank you for joining us today.

she has a bill about the prioritize our payment. and i would associate the comment to saying it works in several states and i heard your testimony that you said it won't work for the federal government. butlet assume for a minute that we have a prioritization bill it becomes law. what level of details would you expect from congress so as the -- treasury department couldn't override or ignore the prioritization process that this bill become law would have in it? that to say what circumstances do you think you can override a law that would direct prioritization. >> to be clear. i didn't say you couldn't write a law that would say which bills you pay first. clearly you could write a law that said . >> what i said was what i believe is correct and is something we really need to

focus on is that if you were to do that. if you were to lock in the idea of one set of bill and not the others, we're avoiding default. that's not correct. if you don't pay all obligation it's one or another form. you choose the default. >> go back to my question. assuming we have this law. all right. what level of detail would you expect so you, the department of treasury, couldn't override anything. >> i'm not sure i understand. we comply with laws when they're written and comply with the law. that's not the issue. the issue is that the law . >> my time is -- to be clear of the bill came out of the congress and it was a law you intend to follow it to the letter. >> we always endeavor to follow the law. all right. i want to to be sure. you will follow it. endeavoring and following slightly different. i can't comment on a law i

haven't read. we need to discuss them. could you set an order -- on the $3 million cap roughly $20 5,000 a year. new policy, can you tell me. the wall "the wall street journal" estimates that 6% of the population will be impacted by the new cap. i remember your testimony saying a small amount of people. heard a lot of complaining about the 1%. are with targeting the of%? our position is clear. we want all american to save for their retirement. open we want to encourage people who don't save to save.

we want to make it easier not harder. in a world of tough choices when most have less than $100,000. saying the tax benefit ends at $3 million is a reasonable treadoff to me. >> thank you. >> mr. hoffman. >> thank you for being here. i want to associate myself with those who expressed opposition to the cpi. i also appreciate the fact that the administration has very specifically linked that hundreds of billions of dollars in new tax revenue. so far a republican colleagues have flatly rejected. i don't know how likely that bargain is at this point. one thing that strikes me as very possible if not likely in the congress is comprehensive immigration reform. i want to ask your thoughts as we think about the budget horizon discussing today.

congressman, i have haven't been working on immigration reform. the i have worked on the pressure. country only conclude one of the thing that made us the strong country we are constantly refreshing ourself with people who want to come here or work hard, play by the rule and make a contribution. i think immigration reform would -- to many people only goal is to contribute to society. that's got to be good in term of the economy. the fact is our economy has work to be done. and i think there's hopefully going to be a bipartisan agreement that is fair. that overedders that is very much in keeping with both concerns that we break people out of the shadow. that we also insist on

compliance with the law. with respect to both the deficit and the debt at the ten-year hires. would it be fair to assume it would have positive effect. >> i would have to go back and look an lit -- an lettedly at the number. intuitively i think it makes sense. i haven't seen an analysis. >> a few stoakdz learn. you learn. thank you, mr. chairman. thank you for being here. january 1. 600 billion tax increase added to a $1 trillion tax increase went in to effect as part of affordable care act. shortly after that, it call for additional tax increases. the president's budget access of

$1 trillion. the question the administration think that the american people are not pay enough money? >> congressman, the administration had a consistent view we have a big hole in our budget a fiscal gap. it has to be close with a fair balance of $2 of spending to $1 in revenue. in december there was extensive discussion where republican leaders were saying raise a trillion dollars by broadening base and closing loophole. we want to do that. with $2 spending cut for $1 of revenue. you have $1.6 trillion january 1. we didn't get any $2. we enacted the spending cut first. we enacted over a trillion in spending cut. we already have twice as much spending cut as we do revenue. we need to finish the job and look at everything we have done since we started trying to close this $4 trillion gap. it will get to two to one, if

the president's plan is a basis for agreement. >> the administration continues to say that -- aren't necessary. at what point does our national debt cause a problem. our national debt cannot to grow as a percentage of gdp without it becoming a problem. it brings it down to around 73% the debt of percentage of gdp. that's why the deficit brought to down to under $2% of gdp. i wish the hole wasn't as deep as it was when the president took office. i wish we didn't have a economy in free fall that needed to be brought back to help. that was what the world looked like in 2009. our economy is growing. we newed to be on path with a balance deficit reduction. to get -- i think would be good for the economy.

all right. and the president came forward with a plan to address some of the problem with social security and he started blaming. republicans. does the president standby his plan. >> i'm not sure which plan you're referring to. >> the issue of growth and social security. >> well, the president has for a number of years, continues to believe with that we should work on bipartisan basis to have a balance, fair approach to protect social security basic structure. along the line of the 1983 agreement has a bipartisan approach for long-term 75 year sol gent sei -- solvent sei. >> thank you mr. chairman, thank you, secretary for testimony. it seems to be a consistent narrative among many in the house and the other side of the aisle that this administration has taken us on a fiscalically unsustainable course.

as a result of unlimited desire to spend and get the spending under criminal. am i correct that it's this administration that has reduced the deficit by $2.5 trillion over the last several years. >> congressman, yes yes together with congress. possibly defaultings circumstance with the debt ceiling. and part of the reason why some have suggested that the debt ceiling is problematic and our need to raise it is problematic. it's because of a misconsumption as it relates to the debt ceiling represents. isn't it a backwards looking vehicle that gives the

administration the opportunity to pay for bills that have already been encouraged. >> that's correct. most of the obligation that have been incurred or many obligation relate to policy and decisions that were made during the eight years of prior administration. that would include the tax cut. >> absolutely. >> and include the prescription drug benefit. conclude the entered to as it relates to iraq weapons of mass destruction that never found. >> all spending authorized by congress is included. and the spending you have described is all part of what is being covered. >> based on your experiences in clinton administration, it would be fair to say that perhaps the best strategy in order to deal

with the debt problem as well as the deficit issue that we confront as evidence by the fact that the clinton administration turned over a surplus that was subsequently blown by the bush administration? isn't the best strategy to invest and grow our economy? >> i think that the best strategy is a growing economy. growing job and balance deficit reduction. a mix of spending and tax nosh get the done. >> are there alternative other than the chained cpi that can strengthen the soft vent sei. solvent sei of social security. >> thank you. >> thank you, mr. chairman. and thank you, secretary lew for extending your time and joining us today. i'm going join in the effort by many of my colleagues before me today that i appreciate your responses about moving the

economy and investing in jobs, and i mentioned two other folks that come before the committee the state with the negative job growth. only the state in the country. we are seeing some improvement with negative job growth. i'm excited about many provisions in the president's budget proposal that invest in job growth. i would like to thank you for your investment in the budget for health services. i propose an amendment to the republican budget that would fund ihs, which is woefully underfunded in the health care sector growth by 0% if we fully invest in health care, jobs. and i appreciate all of those efforts in bringing jobs to rural new mexico. i quickly -- since i have little time. want to thank the administration for prioritizing veteran. i want to highlight a couple we have 63.5 billion in the administration. it's 8.5 increase over 2012. and it provides mental health

care, specialized care for women, veterans and benefit for care givers. 7 billion set aside for mental health services such as ptsd, and sexual trauma which is a increase over the 2012 level and 13-6d with the backlog. can you tell me with the investment and working hard to get our veterans back to work and companies in new mexico not hiring because of the sequester, can you give me a sense of how many jobs this might create? and how many veterans might be able to get back in to the employment pipeline. >> i can tell you the direction. i have goat back to you. get back to you on the exact number of jobs. >> fee -- feel free to make a statement. please get back to me in writing about that job growth and the development for veterans. >> first principle, we have sacred obligation to the veterans who put their lives on the line to protect our country. to treat them right when they

come home. that means helping them to get the job training or the jobs they need and the health care they need and the support in their community they need. the budget invests in a tight budget. billions of dollars to try to keep that promise. now a part from basic decedent sei and fairness associated with our policy, it's good for the economy. our soldier come back with leadership skills, management skill, the ability to make a contribution that we can't afford to lose. and it's only a plus when we matchup a veteran with a kind of opportunity that gives them the chance to contribute a civilian as they did when they were in the military. >> my time wraps up. we have the highest suicide rate by veterans than we have seen before and the number one homeless group in veterans in women in my direct. thank you. ..

>> the president's budget budget, or does it look to invest in education and

training our current work force and teacher workforce? >> yes. we have a number of proposals to help get the skills training they need starting from high-school to workers displaced. >> the president's budget talks are increasing investment in preschool as well. >> correct all the way through. >> what i say from the perspective is that all businesses make decisions on where the market is. if we grow the economy and small businesses see that they will make the decision to invest and hire. if it will be shrinking they will not take a risk by investing. fundamentally they look to the bottom line when they make their decisions. >> i have a question for you with your past experience to

know the dynamics of government do successful businesses grow while having debt on their books? >> many businesses have debt for their capital investment and other purposes. >> basically when may look at the economy and the president's budget is actually acknowledges the best way to grow our way out of this dynamic is to continue to grow the economy. even allegros of a slower pace the bottom line is growing throughout the majority. >> we need to continue this but in a fair and balanced way.

fake you i look for juicy your signature. but as a small-business owner for over half of my lifetime i want to reiterate buy a investing in infrastructure and research and development that helps small business owners that is the sequester for those other so that part of the economy. but to ask you a question about taxes people kept talking about the g.o.p. budget. in there is does the math. if you keep saying might have a thick mane of hair but i don't. d reference that? the g.o.p. house budget? >> without knowing how that

will pay for the tax cuts that is proposed we don't really know what it will accomplish. it is a big hole, $5 trillion to cut tax rates. it will either have to raise taxes on middle-class taxpayers or it will not cover the tax cuts proposed. >> this is what i would specifically like to ask also small-business owners paid their taxes the vast majority but we do have the offshore tax abuse. the gao report talks about some of the tax expenditures and how this is growing in the country and with the administration position i hear there are 18,000 corporations in the cayman island. this is tax avoidance could you address that from the

administration's perspective? >> we want to close opportunities to avoid taxation through abusive practices in the rehab done a lot to create transparencies so we can say when businesses and individuals take it come off shore in order to avoid taxation. the second area is what is labeled that shouldn't be how to read close the loopholes that shouldn't exist? illegal forms and to work together to shut down ways to legally avoid taxes. >> is the administration open to language to better define with businesses? >> we would look forward to working together. >> ink you very much. >> we have you done with

seven minutes to use there i in -- appreciate your indulgence we will agree to disagree but i would like to think we have discovered a few possibilities with common ground. the meeting is adjourned. [inaudible conversations] cpac it is fair to say we are focused on growing the size of the afghan national security forces focused on improving the quality of the

group away will focus on a leadership development and a ministerial capacity aviation and the system process an institution needed to sustain a modern professional force you also need to address very real psychological factors affecting the outcome of the campaign. with regard to political factors we're at a point* in the campaign there is real tension between increasing aspirations of afghan sovereignty and operations conducted in accordance with the dead did -- security council of state and the technical agreement. with is managing that attention is the psychological aspect is equally important. psychology will meet with the afghan forces this summer and effect a critical elections of 2014. we have growing that many afghans have told me they no

longer feel the taliban is as much as what they fear after 2014. one afghan described it is the yankee's you fact. growing since december 2014 is the cliff for the afghan people. that must be addressed with incredible narrative if absence with the hope of the leader with regional actors continue to head jan plan for the worse case. the behavior associated that mindset has the potential to undermine the campaign. there is a great deal to be optimistic about at this point* but we are in the decisive phase of transition for the progress we made provides real opportunity by not inevitability. there will be challenges to test our will and endurance but in the end if we define winning as security transition wealth rendering al qaeda it ineffective, if we define winning to set the

conditions for the afghans to exploit the decade of opportunity in 2015 i firmly believe we can win.

>> on this very important legislation, the american people might wonder why the senate hasn't voted on pending amendments to the legislation we voted to proceed and this calls to the senate should debate the bill and that is why i just said i am glad we are getting there. and there has been very little debate. the president has said the various proposals deserved a

vote and we on this side of the aisle don't tend to stand in the way to proceed particularly on the amendments and i hope we're able to vote very soon. last week senator manchin and to me had a background check agreement. of the toomey-manchin amendment is the first one we would phonon but just turning the debate now obviously we have not voted so hopefully we will get to the vote. we have not voted because despite claims from the other side background checks are not and never have been does the spot of gun-control debate to we have not voted because supporters don't have the of the votes to pass it at this point* the

way it appears to me and i think they know it. they don't have the votes even though published reports indicate vice president by dint the president of the senate call senators asking them to support the toomey-manchin bill. they must not be telling him what he wants to hear. now have the votes for the background checks even though the vice president has stated the opposition to the proposal comes only from quote-unquote the black helicopter crowd. well it doesn't. they would impose obligations on gun owners even though expanding background checks would have done nothing to stop newtown or other mass killings. it would do so even though expanding background checks

would do nothing to prevent these killings in the future. i often'' the deputy director of the national institute of justice and that is too recent they wrote that background checks could work only if universal and accompanied by gun registration. and of course, most members of the senate opposed registration. they know what has happened historically. it has led to confiscation and to members of the senate and more of people fear that and don't want to go down that road. the background check amendment claims to strengthen the rights of gun owners.

but in fact,, it does not. the fact is the opposite is true. opposition to the amendment does not come from fringe elements of society. in fact,, one of the reasons the senate has of voted on the amendment is so widespread opposition to the amendment for many quarters. if only fringe elements had problems with it, we would be voting on the amendment. keep watching. if we do not vote on toomey-manchin it means the proponents know they don't have the votes to pass it. if we turn to assault weapons or magazines then it is clear that the maturity knows is far from the number of the votes they need. i think people will be waiting for time while they try to pick up the boats that probably will never be

there. on this side of the aisle our caucus hopes to have their amendment considered soon to go on those amendments. on like toomey-manchin will actually strengthen the second amendment rights but in health war to gun violence by criminals. there are reports the other side of the aisle wants to block one of the amendments to do that. so i lay out what i think is a situation. maybe there is leaders to dispute me but that is the way i see it. the majority doesn't have the votes to pass the amendment so we aren't voting in the majority wants to block the republican amendments they fear would pass a weary their voting -- so we are voting and the senate voted to proceed and

debates in the senate was promised the amendment process that means conducting votes on the various amendments offered but so far that has not happened. may be soon i hope that happens so i ask the audience to stay tuned. are yields the floor. thank you very much. >> first i have unanimous consent request to me during this session with the approval of the leaders i ask unanimous consent the spee agreed to and the request printed in the record. thank you. mr. president we debating one of the most important bills we had in front of the senate for a long time the reason is what happened is in newtown connecticut december 14 gun violence takes its toll every day in america in cities all across the country and in my home

state of illinois. because we hear of the victims but our nation is saddened by what happened to boston increase still don't know the cause and what is responsible for it. i just have to say we are stunned and members of the senate that i work with the immigration bill and plan to announce it today we postponed for respect of the people of boston is a moment of grave concern across america we wait for the information to build the case for those are responsible i for one in sure colleagues feel the same way we do want to rush to judgment until we have a tough tax but the sadness we feel for america open and

free where people stand on the sidelines cheering marathon runners is profound in the senate today. the issue before us is the safety because 20 beautiful first graders were massacred at a grade school at sandy hook in the town of new telekinetic it. six of those teachers and administrators gave their lives in defense of those children. not a parent or grandparent to live you did not identify with the horrible loss. last week i met with a group of parents from sandy hook alimentary who's still have the courage to come to congress to bay gas to do something to spare future families and children from this type of massacre. i met with them early in the morning and not a dry eye in the room as you can imagine as they showed me the

photographs of their children who we're gone. i commend them for their courage and now if that senate has the courage. we know what's at stake i come from a diverse state downstate illinois more small town, rural, of gun owners than the great city of chicago and for 14 years i ray and in down state illinois with a gun issues were polished tile and important to many people i to positions which the gun lobby did not care for and several times they decided to wage a campaign when iran for reelection and i survive their attacks and eventually elected to the senate. this is the first meaningful gun safety legislation we have taken up since i was elected to this body over 16

years ago. we're here because of new telekinetic get. no question. we want to remind people our own gabrielle giffords congresswoman from arizona at a town meeting, a town meeting was gunned down after being shot down point* blank in the face and we did nothing. no hearings, no changes of the law, just another gun statistic to many. but newtown touched our hearts to think those pitiful little children could be massacred in the grade school classroom one child was shot 11 times. 11 times with the semiautomatic weapon firing off rounds fast as he could load them so we are here today in the beginning of a

debate what is at stake? this is about background checks and here are the basic questions. do we believe the current federal law which prohibits a convicted felon a person under the order from the court to avoid domestic abuse that has been judged mentally incompetent to buy a gun in america. 90 percent of americans say that is an easy question. no. in fact, 75 percent of gun owners say that. i come from a family of gun owners. they are responsible law abiding citizens who would never dream of looking the other way if a convicted felon wanted to buy a gun or mentally deranged. they use them in a safe manner and represent the

majority of gun owners across america. if this is such an obvious question would 90 percent of americans agree that we should not sell guns of those who have been convicted of a felony then why is this being debated? what is the big deal? what would it you think this space is full of tourists what if the flight attendants said welcome aboard i hope you have a safe flight fasten your seat belt incidentally the gsa would like to inform you that we have closely checked the passengers on board the plane to see if they are carrying guns or bombs and we're happy to report we have checked 60%. have the nice flight. 60%? does that give you peace of

mind? that is what is going on today. 40 percent of fire arms are not subject to background checks. what difference does that make? going back a moment in history in my state of illinois that illustrates why this is so important. ricky was the head coach of the men's basketball team back in the 1990's. he was a great fellow fellow, loving husband, father of three children and deep christian faith. july 2nd, 1989 the coach was walking with two children through skokie illinois zero white supremacist drove up been shot him to death in front of his kids. he was 43 years old.

he went on a shooting spree for days randomly targeting african-americans asian-americans and shoes and he killed two and wounded nine here is the reality. the man who did the shooting ever should have owned a gun. he was prohibited by law from buying guns because of the domestic violence restraining order against him. before his murderous ramp plays -- rampage she tried to buy a gun from a licensed dealer libby was rejected but this white supremacist took advantage of a gap that still exist today he found the advertisement in the classified section in the newspaper the gun trafficker had been buying guns from a dealer over 72 in a two year

period then turning around and reselling them through the classified ads for those to not go through the background check. secular thought to handguns to without a background check he use those a and killed ricky on the streets in front of his children. the amendment before us today would make that more difficult if not impossible. under the mansion -- toomey-manchin amendment they would be required to buy a gun is advertised that would make it difficult to get the murderous weapon. that is one issue and it is critically important. senator manchin is from virginia and a conservative democrat no debate.

senator toomey one of the most conservative republicans from the commonwealth of pennsylvania but they came together to say let's right something that is respectful to gun owners but closing the gaps when it comes to background checks. i think they have done a good job but they put things in this amendment i don't like at all. it repeals the law that prevents hand guns sold to add a state buyers i don't want to vote for those but this is the nature of a compromise and the senate if we pass this i have to be prepared to take on and except issues that i personally don't agree with because of the larger good. the notion of plucking bats 40% gap is so compelling i

am prepared to accept parts of this i don't like. i will never get exactly what i want on the floor nor will any senator expect to we have differences of opinion of opinion and philosophy i want to commend the senators were stepping up. this was a d.c. they could have stepped back to say let somebody else do this i know they have taken in grief the major organizations opposed the amendment that we need to do this we save the lives of those children at newtown connecticut this measure would not have because the guns he use were purchased by his mother who could legally purchase the guns. but it could save the life of rekey and also of so many others gunned down on the

streets of his people were using guns and had no legal right. the toomey-manchin amendment moves as in the direction of closing the gap. i know the gun lobby opposes this amendment and that and know their position on the other bill but overwhelmingly americans and gun owners support it. here's the question. can the senate rise above the political pressure to vote for this measure? we need 60 votes and it has to be bipartisan a good number on the other side and i encouraged by last week's but we had a preliminary procedural vote if we would even debate the issue. before the vote came up 13 senators including the minority leader sent a

letter saying they would oppose any effort to debate on the floor of the senate and it looks bad when the republican leader to it that position. the 16 senators stepped up to show courage and a commitment by a floating with us to move forward i am not assuming their votes on any issues but i want to commend them in this spirit of this institution that has failed to except its mandate to deliberate to vote on the most important issues of our time i want to commend them for remembering that it to commit themselves for a least in caging this debate on the floor of the united states senate. what about background checks? the gun large lobby argues it is unconstitutional even though justice scalia made it clear in the heller

decision that said basically second amendment is a personal right to bear arms not the rights of the militia but laws imposing conditions and qualifications of the commercial sale of arms are lawful so there is no doubt in his mind that a background check is consistent with the second amendment and it also argues background checks are ineffective. you have heard this. pass all laws that you want and the law-abiding citizens to live by them but the criminals want. nearly 2 million prohibited purchasers have been blocked from buying a gun since back run checks went into effect so careless and stupid they tried anyway. they were stopped. why are there so many crimes

committed? because they get the guns through another means through the ads in the newspaper that i mentioned revere and the argument that unless all lot is airtight we should not pass it will be used that standard for speeding on highways or testing? i don't think so we use our best to set a reasonable standard understanding those will violate the law in the same thing holds true we should not approve background checks and toby prosecute more cases were buyers bailed background checks without the agency that gathers that information? atf if you look you on notice for years the gun lobby has tried to keep this a liter less agency to not have the power to enforce the laws on the books.

they cannot have it both ways to stop them from their job and not let them prosecute seriously. we will have the votes to see where the numbers stand. will they stand with our police officers, religious leaders, doctors come in ears, teachers, victims of gun violence in their families and 90 percent of americans to support these reform proposals to save lives in this country or with the gun lobby that refuses to compromise even when lives could be saved? i know where i will stand with rickey's family and his widow and she wrote me earlier this year when i held a hearing in this is what she said. >> howe criminal can buy a gun was no questions asked is absurd. something must be done about it" end quote.

an important question with important person whose life was changed forever because we do not have a strong law or enforce it. i stand with other families to suffer a tragedy those families from newtown who were here last week and the victim's in my home town and the city of chicago i am honored to represent sick and tired of the gun lobby to put industry profits before common-sense and tired of the law be having its way in congress year after deadly year. i urge my colleagues to join in to support common-sense reform for gun safety to support the toomey-manchin amendment on the senate floor. mr. president i yield the floor is just the absence of a quorum.

[inaudible conversations]

let me begin by noting by over 100 years the modern has been headquartered in the boston back bay a few blocks from yesterday's horrific bombings and we are all thinking of our boston neighbors for our guests are martelli for americans for responsible solutions boasts the first time and passed and we welcome them. we have hosted hundreds of politicians that these reckless but only to former astronauts john glenn and out martelli. a new jersey native to later earned a master's degree in aeronautical engineering from the u.s. naval postgraduate school to become an aviator 1987 and flew 39 combat missions in operation desert storm and made four trips into space. in j recapping kelly and

former representative gabrielle giffords founded as americans for responsible solutions. in your native she graduated from college serving as the communications director for the democratic party and as chief of staff prior to the launch of americans for responsible solutions assistant secretary for public affairs at the department of romance security. now on to the mechanical matters no live claudine horror treating our filing while the breakfast is under way. no embargo when the breakfast is over except as c-span has agreed not to use video for at least one hour after the breakfast inns to give you a chance to file. if you would like to ask questions send me a signal we will offer our guesstimates opening comments then we will go

with questions around the table. thank you for coming. >> you are very welcome. it is great for me to be mentioned in the same sentence with john glenn because he is certainly one of my heroes. last february 2012 i had the opportunity to speak can attend the 50th anniversary of his first flight into space to orbit the earth in during the dinner i got to sit between john glenn and neil armstrong which other than my four space flights was the highlight of my career as an astronaut so it is great to be mentioned in the same sentence. yesterday was a really difficult day for our country and especially those folks to living and working in boston. i know the "christian science monitor" is based in boston and we have someone here from "the boston globe"

so our hearts go out to the citizens of boston and everybody from around the world it is a difficult day for our country. are also wanted knowledge today is the six year anniversary of another horrific event and that was the shooting at virginia tech just six years ago today that over 30 people were murdered by a man who was clearly mentally ill and adjudicated as mentally ill. under the legislation that is currently proposed in the senate, that incident may never have been. let me back up. on january 82011 i was home in houston with my two daughters.

gabby and i had a commuter marriage between houston, washington, a tucson sometimes we would go counterclockwise but that day she was in her district meeting with her constituents at a safeway doing the most basic thing to reach out and speak. i was at home training for a shuttle mission, home with my two daughters when gaby's chief of staff said simply she's been shot. i call back a few minutes later than may found out she had a gunshot wound to the head. it has been quite the roller-coaster ride since with some really low points and high points but the low points being as myself and my mom and two daughters travel to tucson we found out that she had died.

it is of rough road but things have come out of it. gabby is doing really well she would have liked to have been here but it is in early morning and we have a long day. in december of last year about four months ago gabby and i decided to start an organization to address this epidemic of gun violence that we have seen just escalate in my opinion from one year to the next scene is to get worse the mass shooting seemed to be more frequent, the gun death from cities do not seem to be under control. so we spend time thinking what would be the best way to address this problem and it didn't take too long to

settle on forming an organization that could do lobbying but do the hard political work to try to re-elect members to the house and senate to make tough choices to oppose this seemingly ever powerful gun lobby to pass some reasonable and common-sense legislation that most americans support. the bill that will be voted on soon in the senate is supported by nearly 90% of american households. more than 90%, 93 percent of households who have gun owners. also looking at conservative states like texas and arizona it has over 80 percent support for the

expanded background check is from the nra members. we have a bill that if it was my job it is not the exact one i would write but at this point* i am more in favor of the bill that would be voted on. the reason is it was born out of compromise. compromise between the conservative democrat and a rather conservative republican with senators manchin and toomey. a good piece of legislation if enacted and signed will be something to prevent many criminals been dangerously mentally ill people from getting access, easy access

to firearms. right now we have 40 percent of all guns bought without a background check that is completely unacceptable. what happened to it gabby i am master than the man who shot gabby pass a background check? yes. of so he went to the sporting goods store and passed the background check but the reality is he should not have. he was clearly mentally ill ill, the community college knew that. he was the ignited heavy drug user and had the records and should have failed and rejected from the army if you would have failed in the state of arizona, he could have gone down to the good show or bottom over the internet. it is critically important we close that loophole. is also critically important

we get the records of mental illness in to the federal and state criminal background check of which 121,000 sapped with the states of arizona on the day gabby was injured. while i am optimistic we can get something passed we have problems with senators right now with regards to this bill in my opinion and in the opinion of our organization there are a lot of u.s. senators that are just looking for our reason. i experienced this personally last night when i was shown the facebook posting of senator jeff lakes from arizona, that he

intends to vote no for the legislation and his reasons that he cites a you are welcome to take a look at that if you word take a look at the bill is seems maybe he has not read the bill. his concerns are clearly addressed in the piece of legislation. what is going on? what i imagine senator flaked and those that we hope to get to yes we hope we've a reason to get to know because of the gun lobby and how that might affect their next election. our organization is to provide a place they can lead for if they take the tough votes to support them

and if they won't stand up and do with the american people are asking, we will be there to try to replace them. that is our role in this debate as well as help people understand the legislation to try to convince them this is the right thing to do. it's the right thing to do for one clear reason because it is completely unacceptable in our country today to have 20, first graders either classroom with their teachers and more than 30 people every day murdered with a handgun in this country. it is completely unacceptable we have 15 or 20 times the murder rate from guns and other similar countries. >> isn't it wonderful how we agree? bank you for the summary and the only reason i am

stopping you because there will be upset if they cannot have questions. but to summarize the state of the legislation says it got very little chance of passing in the senate and faces outright rejection in the house and by dan worked the phones yesterday for not much it effected and even personal appeals from your wife haven't worked either. say you come in pessimistic about the odds to get this done? >> no. not complete the. i think two weeks ago this legislation was dead. then there weren't those that optimistic that we are looking at the way people will go. it is an uphill climb that i am confident that we have a

chance to convince people to do the right thing and stand with their constituents and not the gun lobby. >> i know you're going to the dedication this afternoon. the reality of having politicians that that. [inaudible] >> occurred to me this morning when i woke up that senator flics timing for his posting to his facebook was not ideal in mind opinion but he is a friend of gabby i don't think this is over and we have not given up i view him as a reasonable

person and when i explained to him in person why his concerns with this bill are unfounded i think we can get him to come around but the timing did occur to me as not a deal from his perspective. >> could you talk about the recruiting of candidates with your, how many? have you recruit candidates that might cast to be more compromised i am a strong

supporter of the second amendment like most americans are. we're both gun owners i served in the military 25 years. gabby and i understand it is unacceptable with the amount of deaths from handguns is completely unacceptable and to do nothing the status quo is not working for us. there is a problem and it is the obligation of the of federal runner to do something about it. looking to support candidates we could find people that are much like us. when you look at the polling data most of the country stands with us -- pro the

second amendment and then writes better realize there are things we can do to reduce violence. this bill will not stop murder from every gun. the legislation we passed over the years can go a long way to solving a problem. that clean air act did not get rid of all the pollution but a lot of it and it made our air cleaner and our lives a lot healthier and we can do the same thing with gun violence if reenact reasonable legislation. >> to play devil's advocate that 90 percent of the people went up background check. gallup poll had a poll that says only 4 percent of

americans nanjing guns as the nation's top problem. isn't your political problem is one of intensity that people don't put it very high and those who do are really organized? >> is a master not i would get questions why are we going back to the moon it? the get the polling data were the space program stands with people's issues. it does not get a lot of attention. it does not tend to be a subject that is on the

forefront of the issues. it isn't but newtown moved it up on the list a lot. obviously for us this is our top priority but i do understand is that everybody's top priority. >> how to approach the red state people to get them on board with their constituents are saying. [inaudible] >> you try to convince them that the people they are hearing from is a minority

and the constituents are actually okay with reasonable legislation to keep guns out of the hands of criminals. i sat in members' offices who have said i read that there should be a universal back project and we need to address high-capacity magazines and assault weapons but i cannot vote on that. we need to convince them there is the organization to defend them from the gun lobby for when they take the tough votes and that is why we started the organization organization, the nra, gun owners of america to have an outstanding job over the past 30 years. in my opinion seems to control the votes on gun

legislation of the majority of the members of congress. that needs to be fixed. is might take some election cycles. >> they add a 100 year head start. this will take a little bit of time. but i will say i am amazed at the amount of resources we have been able to put together. back in to every in the nra had their best month ever with their fund-raising. we did a lot better.

americans realize something he adds to be done but it is a formidable organization. and why were they all for background checks in 1989 but now they are not? because they know how networks it as a strategic move on there part not to be reasonable, hold the line but they're making it easier for criminals and mentally ill to get guns. and people die. i am hopeful that at some point* we can get that nra to support pieces of this legislation. the toomey-manchin bill is backed by to gun rights groups over the last couple days and that is a positive outcome.

>> over the next few days. >> dead what are you doing now? to try to do the final push through legislation? >> pro calls and meetings. a lot of them. the one-on-one meeting with the members with me, the newtown families are critical to get this passed. when you meet from the

classroom and unloaded with a to 50 rounds in five minutes, it is difficult to look that person in the face and say we will not do anything about that. that is a difficult thing for a member of congress to do. and the same goes for what happened to gabby. six constituents and murdered, 12 injured, she was nearly assassinated and two 1/2 years ago doing her job and what did congress to? what did they do? they didn't do anything. the inaction on the issue really needs to stop. >> why hasn't the president been able to use the bully pulpit to get effectively what is the